Organizational culture has emerged as a pivotal factor that can significantly influence workplace outcomes. Gone are the days when culture was seen merely as a nebulous concept; it now stands as a strategic lever that can be measured and managed effectively. To do so, leaders must move beyond assumptions and gut feelings gleened from water-cooler talk or Zoom-reactions during team calls. Instead, they should aim to understand the real dynamics shaping their teams and organizations through data-backed culture measures where the meaningful data can empower them to make informed, strategic decisions that elevate performance and engagement.
Transforming Culture into Strategy
Understanding the Impact of Culture
“Culture eats strategy for breakfast.” – Peter Drucker
Transforming culture into strategy is not just a leadership ideal—it’s a performance imperative. Research from Forbes reveals that companies with adaptive, operationalized cultures experience nearly 50% revenue growth, significantly outperforming the 17% growth seen in non-adaptive cultures. Moreover, organizations with strong cultures can see up to 85% higher net profits over five years.
However, aligning culture with strategy requires more than just writing exciting words on the office walls. Instead, organizational leadership should be intentional in their actions to help steer behavior, enable alignment during periods of uncertainty or change, and provide a steady foundation for performance. For example, when innovation is a stated and lived value, teams feel empowered to experiment and pursue bold ideas. In turn, these behaviors support growth strategies and build resilience.
Additionally, cultures of inclusion and connection are especially important in today’s hybrid and distributed work environments. When people feel seen, understood, and aligned with the larger mission, performance improves and attrition drops. McKinsey agrees!
Know How You’re Doing?
With culture playing such a significant role in business outcomes, the natural question becomes: how do you know where yours stands? And how do you know what to focus on?
This is where culture diagnostics come in. Having a structured and research-backed process to regularly assess your current state— like the Principles Culture Survey—gives leaders the clarity on the areas they need to prioritize and act. Rather than relying on anecdotes or intuition, diagnostics provide a clear picture across key dimensions such as clarity, collaboration, communication, connection, and contribution..
By identifying areas of strength and opportunities for growth, leaders can zero in on the right interventions, better allocate resources, and design initiatives that actually move the needle. Culture diagnostics help connect the dots between values, behaviors, and outcomes—turning a powerful but often abstract concept into something actionable and trackable. And to reiterate from the studies linked above, cultural improvement drives meaningful ROI for the companies too: from revenue growth and profits, to retention and performance improvement.
Steps to Improve Workplace Culture
Improving culture isn’t about quick fixes. It’s about taking a deliberate, disciplined approach. Here’s a common pathway:
- Assess Current Culture: Use a diagnostic tool to surface where things stand today and where there may be gaps.
- Define Desired Culture: Clarify the cultural attributes that will support your mission and strategic direction.
- Develop an Action Plan: Build a focused roadmap that connects diagnostics to change, prioritizing areas that matter most.
- Implement Changes: Introduce new rituals, practices, or behaviors that reinforce your desired culture.
- Monitor Progress: Reassess periodically to understand what’s working, what’s not, and where to go next.
Final Thought
Culture is too important to be left to chance. A well-run diagnostic doesn’t just describe culture—it gives leaders the insight and confidence to shape it.
